Client Alerts
April 13, 2017

Don't Step In it

Stites & Harbison, PLLC Legal Update, April 13, 2017

On April 11, 2017, the Court of Appeals for the D.C. Circuit, in Waterkeeper Alliance, et al., v. EPA,1 vacated a 2008 EPA rule that exempted farms from certain hazardous substance reporting requirements (the “2008 Rule”). The 2008 Rule exempted farms from the requirement under Section 103 of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) to notify the National Response Center following a release of a hazardous substance in excess of a threshold amount (the “reportable quantity”) set by EPA. The 2008 Rule also exempted farms, except for those qualifying as large concentrated animal feeding operations (“CAFOs”), from the obligation under the Emergency Planning and Community Right-to-Know Act (“EPCRA”) to notify state and local authorities whenever extremely hazardous substances are released into the environment. The Court found that the 2008 Rule could not be considered a reasonable interpretation of a statutory ambiguity or a proper application of the de minimis exception and vacated the reporting exemption for farms.2

As part of the decomposition process, animal waste emits (among others) ammonia and hydrogen sulfide. The emissions of these substances can be exacerbated during the manure handling process, especially when manure pits are agitated prior to pumping. EPA has classified both of these substances as “hazardous substances” under CERCLA and as “extremely hazardous substances” under EPCRA and has established a reportable quantity for each at 100 pounds per day.3 EPA issued the 2008 Rule, which exempted farms from the reporting requirements, due in part to its conclusion that “reports are unnecessary because, in most cases, a federal response is impractical and unlikely.”4

In reviewing the 2008 Rule, the Court applied the now-familiar two-step Chevron review of agency action. First, the Court considers whether Congress directly spoke on the subject of the regulation. If so, the agency’s regulation must comport to Congress’ directive. Second, if Congress is ambiguous or silent on the subject matter, the Court must consider whether the agency interpretation is reasonable. EPA asserted that other unrelated exemptions and the statutory authority to set reportable quantities created ambiguity as to whether it could create new exemptions like those in the 2008 Rule. EPA also claimed the “de minimis” doctrine where courts are reluctant “to apply the literal terms of a statute to mandate pointless expenditures of effort” allowed it to create the exemption.5 The Court was unpersuaded.

First, they did not find an ambiguity in the statute allowing the exemption thereby ending the need for further analysis.6 Regardless, the Court addressed EPA’s de minimis argument finding that the record presented during rulemaking demonstrated that a federal response to a release of ammonia or hydrogen sulfide would not be “impracticable” as EPA claimed. The Court found that EPA has the authority to require responses in the event of release as defined under CERCLA, and that those response actions would be practicable.7 Moreover, the Court concluded and that state and local officials could use the release reports to narrow investigations of potential releases.8 As a result, the Court vacated the 2008 Rule eliminating the farm exemption for release notifications under CERCLA and EPCRA.9

With this ruling, farms must now comply with the notification requirements of CERCLA and EPCRA if their operations result in the release of ammonia or hydrogen sulfide. CERLA does provide a potential waiver of individual notification requirements for releases that are continuous in nature, and the storage of hazardous substances has been disclosed to the relevant agencies.10 However, because the exemption had previously been in place, it is unclear how EPA or state agencies would treat farm releases of hazardous substances under this exemption. It would be prudent for farms with manure handling facilities capable of consistently producing ammonia or hydrogen sulfide in excess of the 100 pounds per day reportable quantity to review any state or local rules regarding the continuous release exemption.

1Waterkeeper Alliance, et al., v. EPA, Case No. 09-1017 (D.C. Cir., April 11, 2017). The decision can be found at the following link:$file/09-1017-1670473.pdf.
2Id. at 18.
3Id. at 5.
4Id. at 14.
6Id. at 13. Of note, Judge Brown, in a concurring opinion found that the Court need not even look at any of the reasons proffered by EPA because there is no statutory ambiguity authorizing the 2008 Rule. Judge Brown cites to a concurring opinion of now Justice Gorsuch in warning of a renaissance “against the judicial abdication performed in Chevron’s name.” Id., concurring opinion at 3.
7Id. at 15-16.
8Id. at 16
9Id. at 18.
1042 U.S.C. § 9603(f)(2); 40 C.F.R. 302.8.

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